By Peter Switzer
It always surprises me that none of my callers on my Talking Lifestyle radio program (that now goes to Sydney, Melbourne and Brisbane daily) ever ask me: “How do I get rich?”
Maybe they think I’d treat them as someone silly to ask such a general question but I think it’s a fundamentally sensible one, if you don’t know the answer to it.
I want to be rich!
The starting point is to want to be richer. Desire is critical and I’ve talked about this before in my Yahoo columns. The great athletes of the world owe their greatness to this crucial motivator for success.
Create a plan
Next, you need to create a plan to make it happen. I often advise people who are in the wealth-building game that they should immerse themselves in the kinds of knowledge that fund managers and financial advisers get into to give them a competitive advantage.
I recall when I started reading The Australian Financial Review and the business section of The Australian as a young academic in my twenties. It meant I had to stop reading the Daily Tele and the SMH’s sports sections first, as I did from a young age.
It was a break from my normal ways and meant I had symbolically embraced being abnormal. And later in life, I realised that what I’d done had been encapsulated in a famous line from a Robert Frost poem which goes like this: “Two roads diverged in a wood and I – I took the one less travelled by, and that has made all the difference.”
Winners take action
I must admit the people who get off their butts and call me on my radio show or email my TV show are on the road to a road less travelled. I take my hat off to them but I’d love to see a whole lot more of these types of people out there, if only for ratings reasons!
Understand the numbers
All this came back to me when I discovered the “get rich” tips of someone I’d never heard of. CNBC shined the light on Tilman Fertitta, a US billionaire who owns Landry’s, which is a company that owns the Bubba Gump Shrimp Co., Morton’s The Steakhouse, and the Rainforest Cafe.
His operations are worth about US$3 billion and he reckons his success came from having a very healthy respect of the numbers. Now this sounds like logical advice but so many business start-ups are run by passionate people — that’s normal — but for someone to actually start being numbers or financials conscious is actually very abnormal!
“Most entrepreneurs come up with a product or they come up with an idea and they think they can be successful with it,” he told CNBC. “But if they don’t know the financial side of their business and understand credit and working capital and what it takes money-wise, you can’t be successful. The product is just a product.”
His unusual take on business gets down to — a brilliant idea doesn’t make a successful business, accounting does!
The value of being abnormal
OK, I accept this isn’t that unusual, but my next story about Tilman Fertitta underlines how valuable being abnormal can be.
This guy who started with a $6,000 loan and now has 500 properties reckons the best advice he took was “borrow money when you don’t need it!”
It’s counterintuitive but if you borrow when you are winning, you’ll get the best rates, be given a lot more money and you could easily have it when times get rough and when no one wants to lend and good assets are really cheap!
Liquidity means you can be calm when financial times are challenging and you’re in the box seat.
Warren Buffet tip
The greatest investor of the modern era, Warren Buffett, gave me the best advice I’ve heard for making money out of stocks and property, which is be greedy when others a fearful and be fearful when others are greedy.
Two great cliches
Cliches such as ‘buy the worst house in the best street’ and ‘you never went broke taking profit’ are two good rules of thumb for buying property and making money out of stocks.
I’ve advised before that Edward de Bono argues the great performers think outside the square and that gives them a competitive advantage and helps them see opportunities that others totally miss.
My recommendation for getting richer is to model yourself on the abnormal high achievers you see around you. Read biographies of successful entrepreneurs like Richard Branson if you want to build a business. If you want to become a great stock market investor, read about Warren Buffett. And it wouldn’t hurt to go to this website and Switzer Daily every day and think about signing up for the Switzer Super Report, which has some of the best market experts sharing their thoughts each week on how to make money.
The secret of success
The great soccer player, Pele, summed success this way: “Success is no accident. It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing or learning to do.”
This is so important…
I started off by pointing out that at the heart of getting successful with money (i.e. getting richer) is to be abnormal. Well, here’s an abnormal approach to being successful.
Albert Schweitzer advised us many years ago that: “Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.”
I rest my case.
Peter Switzer is the founder of the Switzer Super Report, a newsletter and website for self-managed super funds.